This would be a great addition! Just a simple baking out process with no fuss and no post ps work. Thanks again for looking into this.
I'm sorry if I was a bit confusing. The bake onto self functionality is already in the current version. It can't be used when you're baking a high-res mesh to low-res mesh though. It's only useful if you're working a single mesh. To try it you only need a UV mapped poly/object and make sure no BG layers are selected, then run the baker.
If you're working with the more common hi- to low-poly baking (as showcased in the video above) you have to bake it the traditional way which involves raycasting.
The baker has some functionality which can help reduce issues in certain circumstances, when you have an object consisting of multiple parts in both high- and low-poly mesh (see "Grouping Geometry" in the user guide). This helps avoid "phantom" ray hits between parts. Dumb example, but say you had a car, then the wheel could be isolated by geomtry grouping so that when the wheel is baked no ray will accidentally hit any car geometry, and vice versa.
But otherwise you have to work with tweaking the front/back trace distances to get optimal results if you have a tricky object. A hole inside a baked poly usually means that a trace distance was too short, so the ray hit nothing. Missed areas along object edges can be not enough smoothing on the low-poly mesh so that the ray directions don't "wrap" nicely around. If the trace distances are too long (on complex objects) they might also accidentally hit the wrong part so you get parts of another surface.
I'll look at a material color randomizing script now.